Reacting to the Rankings

Ars Technica is the first blog to publish a point-by-point review of our report on America’s standing in the international broadband rankings, so we congratulate them on their timeliness if not their accuracy.  This is to answer questions they raised about sources and to suggest a better way to analyze the broadband problem than the one they offer.

Our figures on the pricing of entry-level plans come from the survey conducted by the International Telecommunication Union (ITU,) “Measuring the Information Society 2011.” In 2008 and 2010, ITU collected responses from 165 nations that place the U. S. 2^nd in 2008 and 4^th in 2010 in low prices for entry-level broadband plans as a percentage of average income. This price point is important because it shows how low the barrier is for getting poor kids online (without exposing them to fast food.) We’re not the first to highlight America’s low prices for basic service; Yochai Benkler’s Berkman Center report “Next Generation Connectivity,” accepts that the U. S. has low prices for basic service as well. It’s not a controversial finding in the research community, even if it clashes with urban legend.

Oddly, our claim that the average network speed in the United States is 29.6 Mpbs come from the very source that Ars uses in rebuttal, the 3Q 2012 State of the Internet Report from Akamai.  The disconnect here is that Akamai says the best way to evaluate network performance is with the “average peak connection speed” metric rather than the “average connection” metric. In Akamai’s own words: “In contrast to the average connection speed, the average peak connection speed is more representative of Internet connection capacity” (page 13.) This figure corrects for IP address sharing and is in fact 29.6 Mbps across all IP addresses in the U. S. We also use the Akamai figures on high-speed broadband adoption. We believe Average Peak is the better measure even though the U. S. ranks 8^th in the world on average speed and 12^th in average peak. We rank 7^th on high speed adoption, so in any case we're a Top 10 nation in two of the three speed metrics Akamai offers. We agree with Ars on one thing, however: Akamai is the best source for broadband speed data.

UPDATE: In their update in response to this response, Ars claims that a spokesman from Akamai agrees with their view but doesn't offer any of Akamai’s words on the matter:

Ars contacted Chris Nicholson, a spokesperson at Akamai, who agreed with us that the “average connection speed,” of 7.2Mbps represents the actual, real-world average. As any Internet user can attest, real-world speeds fluctuate quite a bit, and an “average peak connection speed” is hardly the same as "average connection speed."

They also attribute our quote from Akamai above to us. To clarify, this is what Akamai says in the report, not an ITIF argument:

“In contrast to the average connection speed, the average peak connection speed is more representative of Internet connection capacity” (page 13.)

You can believe the Akamai report or you can believe Ars Technica, your call.

/UPDATE

Our figures for the adoption rate for homes with computers come from the OECD’s usage data on “Households with access to home computer (2010.)” Computer ownership is a broadband prerequisite, and ITIF has been promoting policies to increase it for years. It’s important because it relates to our biggest broadband issue, the relatively low use of the Internet by Americans who are poor, have low levels of education, are elderly, or are uncomfortable with technology. We believe it’s the right measure for adoption in broadband studies, since it helps to isolate adoption issues to the network, not to factors ISPs can’t control, such as poverty and lack of education.

Regarding the other issues Ars raises, we agree with New America’s Ben Lennet that America is “a big country” that needs fiber all over, not just in residential neighborhoods. It makes no sense to bring ultra-fast fiber to the each home until the backhaul, distribution, and core networks have the capacity to handle the traffic ultra-fast home connections can carry. America installed 19 million miles of new fiber in 2011 primarily to deal with capacity issues in the infrastructure.

The last mile itself has more capacity than most realize and does not represent the ultimate bottleneck (cable has an upside of several gigabits per second, and the next generations of DSL and LTE will reach 100 Mbps in many instances.) This is a fact of engineering, not an opinion.

When and where we’ll get higher speeds to the home for lower prices is a question that competition policy will answer. Our  “intermodal” competition policy means Verizon, Time Warner Cable, AT&T and Comcast compete on the basis of speed as well as price, which explains why full-fiber FiOS and mostly fiber U-verse are still adding subscribers faster than cable despite (what we hope is) a transient lull in deployment to new areas. When consumers show a taste for speed, ISPs generally supply it, not just in Sebastopol but across most of the nation, where 100 Mbps technology is available, if not fully utilized.

Regarding Ars’ claim that LTE “is not here yet,” our point was not to say LTE is a general substitute for wire as much as to point out that its deployment contradicts the assumption that American ISPs don’t care about speed. We also suggest that rural residents will need higher data limits than those that the common Verizon and AT&T rate plans currently offer; Sprint already offers such plans. The larger point is that LTE is only a rate plan or two away from replacing DSL in rural America, and that’s a relatively easy problem to solve.

Ars also compares nationwide networks in the U. S. with high-speed, low priced network service packages in cities such as Hong Kong, Riga, Seoul, and Tokyo. We discuss the geographic and policy reasons that American broadband is more expensive at the high end than comparable services in more compact areas. The bottom line is that it’s much more expensive to serve our expansive geography and dispersed population than the dense urban centers in many international cities. Our nationwide ISPs offer uniform pricing regardless of costs, an issue that small scale providers in Hong Kong, San Francisco, Seoul, and Sebastopol don’t need to worry about.

There’s an interesting policy argument behind America’s broadband pricing policy in which high speed, urban users pay charges that exceed costs while rural and low-speed users pay well below cost. The nations with the fastest networks have subsidized them quite heavily, and it’s not obvious at all that a similar exercise would make sense in America because of our high cost factors and the generally rapid pace of network improvement.

UPDATE TWO: Ars quotes Harold Feld on an electronic textbook program in Fairfax, VA that was cancelled due to lack of “affordable Internet access” in that wealthy city, but the Washington Post tells a different story:

The online math textbooks quickly hit several snags. Teachers said that many students did not have access to computers at home.

That’s ITIF 2, Ars 0 for those keeping score at home

/UPDATE TWO

How many teachers would you fire to subsidize a multi-gigabit network in Boring, Oregon or Uncertain, Texas?  For most Americans the answer is “none,” but Ars Technica is free to differ.

UPDATE THREE: See this article in The Register for an explanation of the strange, factually challenged response from Ars Technica: Official: America now a nation of broadband whingers: It’s no utopia, but at least you don't get shot for chewing gum. On another factual note, “whinging” is British slang for "whining."